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Transportation News Bulletins - LTL and TL

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The New Old 'Card Check'
Monday, 20 July 2009 00:00

Labor's top priority isn't dead yet.

Politicians don't typically broadcast their defeat, and when they do it pays to watch for the blindside hit. That's surely the case with last week's reports that six liberal Senators are abandoning part of labor's top priority, "card check" legislation.

The legislation to eliminate secret ballots in union elections has in fact been comatose for weeks, since Pennsylvania's Arlen Specter and Blanche Lincoln of Arkansas declared their opposition. So the real purpose of this "concession" is to shift to Plan B, which is to repackage most of what labor wants with new ribbons and wrapping. The bill that Senators Tom Harkin (Iowa), Mark Pryor (Arkansas), Mr. Specter and others are now considering would still give unions the whip hand in negotiations with management.

One proposal would slash the time for an organizing vote, requiring that it be held within five or 10 days after 30% of workers had signed cards asking for a union. The median time today is 38 days. Organizers want the rush because they know the more time workers have to learn about a union, the less they usually want one. Once employees hear the other side of the story, support dwindles.

This also explains a Big Labor demand to bar companies from requiring their workers to hear management's side during a union campaign. Labor supporters say this creates a "captive audience," but these meetings are one of management's few opportunities to address workers, since companies are barred from the sort of outreach allowed to union organizers—such as visiting employees at home. At the same time, Senators want to give union organizers access to company property.

Democrats also aren't giving up on binding arbitration, which would let a federal arbitrator impose a contract if management and a newly established union at a work site aren't able to agree within 90 days. The provision would encourage unions to make maximum demands and play for time, knowing that an arbitrator could force management's hand. Binding arbitration also denies employees a vote on a contract.

Labor is desperate to rig the bargaining rules because most workers show time and again that they don't want a union. Americans know unions promise higher wages and benefits and more job security. But workers can also see what has happened to such highly unionized industries as steel, autos, airlines and many others. Unions couldn't save those jobs, and in fact they contributed to their demise with contracts that made the industries uncompetitive. Most workers would also rather not hand over a chunk of their paycheck in mandatory dues to finance the political agenda of labor leaders.

Democrats and the AFL-CIO are hoping that if they dump the unpopular secret ballot ban from card check, they can get to their magic number of 60 Senators. The business community and Republicans shouldn't be fooled and let Democrats from swing states off the hook. Card check under any cover is still a job killer.

Wall Street Journal, 7/20/2009

Diesel Drops 5.2¢ to $2.542
Monday, 20 July 2009 00:00

Fuel Now Nearly 50% Below Year-Ago Record.

The average cost of retail diesel in the United States dropped 5.2 cents a gallon last week to $2.542, the third consecutive decline and a level nearly 50% below the record highs of a year ago.

The current price of commercial trucking’s main fuel is $2.222 a gallon below the record $4.764 per gallon set on July 14, 2008, the Department of Energy reported after its latest survey of filling stations.

DOE analysts said the decline at the pump was largely a reflection of the weak economy and falling crude oil prices. The survey was conducted July 13.

“The primary reason [fuel is] going down is because the price of crude oil is falling,” said Tancred Lidderdale, a senior economist with DOE’s Energy Information Administration. He added, “One of the factors bringing the price of crude oil down is the expectation that the gasoline market has passed its peak.”

DOE reported that the gasoline average price declined by 8.4 cents a gallon last week to $2.528, falling back below the diesel average for first time since May 4. The gasoline average was $4.113 one year ago or $1.585 a gallon more than last week. Last week was the lowest price for gasoline since June 8.

American Trucking Associations estimates that the U.S. trucking industry burns 752 million gallons of diesel weekly and 285 million gallons of gasoline. At those rates, truckers paid about $39 million less for diesel and $24 million less for gasoline than the prior week, July 6.

Crude oil was trading at $62.02 a barrel on July 16 on the New York Mercantile Exchange, well below its June 29 closing price of $71.49 a barrel.

But cheaper oil isn’t compensating for the slow freight market, which is making it more difficult for some truckers to recoup their fuel expenses, said Karen Pelle, founder and chief executive officer of Megatrux Inc., Rancho Cucamonga, Calif.

“We finally trained people that there is a fuel surcharge—there is a hike in the cost of fuel, and it’s got to be passed on,” Pelle said. “Now, with all the downturn in the economy, they’re not as sympathetic. You’re lucky to get a fuel surcharge off the East Coast.”

“It’s frustrating that the American business public isn’t conscious of the cost of fuel,” Pelle said.

Doug Houff, president of Houff Transfer Inc., Weyers Cave, Va., agreed.

“I worry more these days about the revenue per mile—the rates—than fuel,” he said. “The rates are terrible.”

He said his company, which has 150 power units and 600 trailers, also is having more difficulty collecting fuel surcharges.

“We had a customer just the other day say she wasn’t going to pay any more fuel surcharges,” Houff said.

He buys fuel from several different suppliers located near the company’s terminal network. “We have about five different suppliers, and we check the price of fuel every day and go with the cheapest one,” he said.

EIA’s Lidderdale cautioned lower pump prices could be short-lived. He suggested the current market is similar to January and February, when crude declined but then rebounded each time.

“The market is taking any kind of news, good or bad, really strongly to heart,” he said. “Prices in any forecast are highly uncertain in this market and this economy.”

Lidderdale said a rule of thumb is that for every dollar decline in the price of a barrel of crude oil, there is an eventual corresponding drop of 2.4 cents a gallon of refinery product at the pump.

“So, the expectation is that the price of diesel probably is going to continue to weaken a little bit as the lower cost of crude oil gets through to the pump,” he said.

Other factors in the price decrease include larger distillate stocks, the highest in 20 years, likely related to a drop in demand for diesel, he said.

“Diesel demand has dropped from 3.95 million barrels a day last year to 3.67 million barrels a day this year—a 7% decline,” Lidderdale said.

EIA economist Laurie Falter added, “What we’re expecting now is that diesel prices likely are going to remain at this level or soften a little bit more in coming weeks. We don’t expect at this point to see any increases in diesel prices from now through the end of August.”

Nor does Falter expect diesel prices to reach the all-time high levels they did last summer.

That could take years, she said.

“If we see a rebirth of demand, then sure, we could see prices go up again to those sorts of levels, but I wouldn’t expect that anytime in the next year or longer,” Falter said.

Transport Topics, 7/20/2009

Ferro's FMCSA nomination goes to Senate
Monday, 20 July 2009 00:00

The White House announced Friday, July 17, that the nomination of Anne S. Ferro as administrator of the Federal Motor Carrier Safety Administration has been sent to the U.S. Senate for confirmation. President Obama on June 4 announced his intent to nominate Ferro as FMCSA administrator. FMCSA safety officer and Assistant Administrator Rose McMurray has been serving as administrator since the Obama administration took office.

Ferro served as Maryland’s Motor Vehicle Administrator between 1997 and 2003, where the White House says she established a strong record in highway safety, regulatory compliance and agency leadership. Ferro also has extensive experience in driver and vehicle safety, having led the Maryland agency’s efforts to establish a graduated licensing program for new drivers in the state, as well as a model for older driver research.

A former Peace Corps volunteer in Cote d’Ivoire, Ferro is currently president of the Maryland Motor Truck Association and serves on several regional advisory committees relating to freight planning, highway safety and transportation funding. In 2008 she was selected as Maryland’s Port Woman of the Year. Ferro earned a master's degree in public management from the University of Maryland and a bachelor's degree from St. John’s College in Annapolis.

The Teamsters on June 5 announced its opposition to Ferro’s nomination because of her support for the current hours-of-service rules. Teamsters President Jim Hoffa told Obama in a letter that Ferro is the wrong person to head FMCSA because of her “trucking-industry party line.” The Teamsters, Public Citizen, Advocates for Highway and Auto Safety, and the Truck Safety Coalition asked an appeals court March 9 to review the latest hours-ofservice rules. The groups also sent a letter to U.S. Transportation Secretary Ray LaHood asking him to begin work on a new regulation.

Under FMCSA's final rule, published Nov. 19 in the Federal Register, commercial motor vehicle (CMV) drivers may continue to drive up to 11 hours within a 14-hour non-extendable window from the start of the workday, following at least 10 consecutive hours off duty. And motor carriers and drivers may continue to restart calculations of the weekly on-duty limits after the driver has at least 34 consecutive hours off duty. The 11-hour and 34-hour rules were at the heart of Public Citizen’s second challenge to the hours rules.

Commercial Carrier Journal, 7/20/2009

10% Cut in Truck Traffic Called ‘Almost Ludicrous’
Monday, 20 July 2009 00:00

The idea of removing 10% of truck traffic from the nation’s highways by 2020 to reduce carbon emissions is “almost ludicrous,” Ray Kuntz, former chairman of American Trucking Associations, told a Senate committee last week.

“The reality is that if intermodal rail tonnage were to double by the year 2020, market share of intermodal would be 1.8%,” said Kuntz, chairman of Watkins and Shepard Trucking, Helena, Mont. “Trucking would still be 71%.”

Kuntz was referring to a Senate bill, introduced in May by Sen. Frank Lautenberg (D-N.J.), that calls for transferring 10% of freight off U.S. roadways to non-highway or multi-modal services by 2020.

He testified at a July 14 hearing of the Senate Environment and Public Works Committee, which is taking the lead in crafting a Senate version of an energy and climate change bill.

The House bill, passed on June 26, contains a cap-and-trade program to limit greenhouse gas emissions for mostly stationary sources such as electrical and coal plants.

Kuntz said trucking is concerned the cap-and-trade provisions being considered by the Senate committee would raise the price of fuel because oil refineries would pass on their cost of complying with the proposed greenhouse gas limitations contained in the House legislation.

Kuntz said the goal of the trucking industry is to reduce fuel consumption.

“But here’s our challenge: We don’t build engines and we don’t refine fuel,” Kuntz told the committee. “But we do pay the price of any increased fuel costs due to climate change legislation.”

Kuntz urged the committee to look at improvements to all modes of transportation, rather than randomly attempting to divert truck traffic off highways.

“It’s very important that the committee stays on the realities and looks at opportunities to reduce the costs of freight and not increase our cost of operation,” Kuntz said.

U.S. Transportation Secretary Ray LaHood agreed that reducing carbon emissions of the transportation sector—which accounts for about one-third of all greenhouse gas pollution—must include solutions other than those aimed at fuel economy and tailpipe standards.

Even if passenger cars were able to eventually meet a 55-miles-a-gallon fuel efficiency standard, “pollution would only decline moderately,” LaHood told the committee.

Solutions also must include reducing the amount of vehicle miles traveled by cars, trucks and buses and increasing transportation options ranging from affordable housing to light rail and bicycle paths, LaHood said.

Transport Topics, 7/20/2009

Cost of Congestion Rises to $87.2 Billion Despite Traffic Downturn, Study Concludes
Monday, 20 July 2009 00:00

Nationwide traffic congestion wasted $87.2 billion—or $750 per traveler—in fuel and productivity during 2007, an increase of 50% over the cost a decade earlier, according to a new report from the Texas Transportation Institute.

TTI’s Urban Mobility Report also said that in 2007, there was a decrease of 40 million travel hours and 40 million gallons of fuel consumed compared with 2006, the first annual reduction in more than 25 years.

Despite that reduction, 2.8 billion gallons of fuel were wasted in 2007 due to congestion, “enough to fill 370,000 18-wheeler fuel delivery trucks—bumper-to-bumper from Houston to Boston to Los Angeles,” the report said.

The report said the decline in fuel consumption was only temporary.

“Even though the problem has leveled off somewhat, we shouldn’t expect it to be a trend,” researchers said in a statement that was released with the report.

While the ongoing recession may have lowered traffic volumes and fuel consumption, the cost is still up $100 million from 2006 because of higher fuel prices and truck delivery delays.

David Schrank, a co-author of the study, said higher pump prices made up about 15% to 20% of the total delay cost.

Darrin Roth, director of highway operations with American Trucking Associations, said to reduce congestion we “need to look at where the freight flows are, find the bottlenecks and focus resources to address those issues.”

Roth said that reducing congestion is about figuring out where there’s the greatest need in order to get the “biggest bang for your buck.”

Schrank said that commercial vehicles costs make up 20% to 25% of the $87.2 billion figure.

Truck travel time is valued at $102.12 per hour, compared with the average cost of time of $15.47 per person hour, the report said. Schrank said truck travel time incorporates the costs of fuel, delay, maintenance insurance, operation, essentially “all costs other than the cargo.”

Brian Turmail, spokesman for the American General Contractors of America, said, “The impact [of congestion] is worse now than when the economy was in full swing, two or three years ago.

“An economic recession is not a good way to fix congestion ills,” Turmail said. “We need to continue to invest and increase investment”

The report looked at congestion in 439 urban areas and found that Los Angeles had the worst congestion, with 70 hours a year per traveler. It was followed by Washington, Atlanta, Houston and San Francisco.

Wichita, Kan., and Lancaster-Palmdale, Calif., were the least congested with six hours a year per traveler.

Tim Lomax, the other coauthor of the study, said in a statement that in improving congestion, “the best solutions are going to be those in which actions by transportation agencies are complemented by businesses, manufacturers and commuters.”

Lomax added: “There’s a mindset that says that this is a city government’s job or a state DOT’s job, but the problem is far too big for transportation agencies alone to address it adequately.”

Pete Ruane, president of the American Road & Transportation Builders Association, said, “It should be a real wake-up call to political leaders and the public that it took the greatest economic downturn in nearly 80 years to cause a slight reduction in traffic congestion. As the report points out, the fact remains there has been a 50% increase in the economic costs of traffic congestion over the past decade, which amounts to a growing ‘hidden tax’ levied on American families and businesses.”

Jim Berard, spokesman for U.S. House Committee on Transportation and Infrastructure, said the report showed that Congress must work to pass a new highway reauthorization bill this year.

“It’s designed to put more investment in the infrastructure, decrease congestion and address the very things the [Texas Transportation Institute] has been talking about for years,” he said.

Transport Topics, 7/20/2009

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